How Did You Lose Your Client?

Lately, I’ve been reading quite a bit about how companies are still trying to fully recover and grow during these challenging times.  Among the most common obstacles to growth is client retention.  An inability to keep the clients you have only makes the climb to new heights that much steeper.  If you’re like most companies, you celebrate the wins and too often dismiss client losses as either inevitable or even welcome (since you didn’t really like them much anyway).  Losing a client can actually be a great opportunity for identifying and improving your firm’s practices and recognizing which clients tend to be a good fit for your company and which clients do not.

Before joining Vistage, when I was actively writing a blog called Client Service Insights (CSI), I used the metaphor of an autopsy and outlined a process for getting to the heart of why companies lose clients, how they can improve retention, and how they can choose their clients more wisely in the future (Yes, you get to choose who you work with).  Have a read, and feel free to adapt this process to your industry accordingly.  As a word of caution, the client relationship autopsy is not for the squeamish!

The Client Relationship Autopsy

The client relationship autopsy is a delicate process, but it may be one of the most valuable exercises you’ll ever undertake as a business owner.

Why?! Why?!

Learning from the failed relationships of the past can be invaluable to building successful ones for the future. The more you know yourself and the dynamics of your client interactions, the healthier it is for everyone. The process will help you choose wisely when it comes to adding new clients, and it will help you glean insights for improving existing client relationships.

The Event

For whatever reason, at whoever’s initiative, a client relationship dies. It could have been triggered by one or a combination of things: a mistake, misunderstanding, change of personnel, a competitor, differing expectations, boredom, difference of opinion, billing dispute, definition of success, and the list goes on.

Step One – Talk To Your Team

Explain that as of today, you will no longer be working with Client X. While there may be an obvious cause of death, it would be a serious mistake not to look deeper. Remind them that this is a client that the firm spent a great deal of time and money trying to secure – that when the team won the business, they cheered as if their country had just won the World Cup. Ask how they feel about how such a once celebrated relationship that had so much promise ended before its time – and possibly in such a gruesome fashion.

Cause of death isn’t actually so much about the cause, as the reason. A person may have died from a virus, but how did he catch it? That’s what we want to understand.

Let the team know you plan to more clearly identify what, if anything, about the relationship could have gone differently. Was it a bad match from the start? Did we not meet their expectations? Did they not meet ours? Where did it start to unravel? And if we recognized and acknowledged that moment of unraveling, could we have done something that would have made a difference? Explain that you look forward to their honest insights. Clearly underscore that this process is not about placing individual blame for the past, but helping the company reflect and make improvements as necessary for the future.

Step Two – The Investigation

The former client isn’t dead, only the relationship. That means you can call and ask to set up a meeting. I would wait a few weeks to let tempers, disappointment, and some measure of reflection find their proper place. Be clear about your intentions and the mutual benefits that may be gained by talking about your past working relationship. It may assist your former client with selecting a more appropriate firm in the future and help you improve your processes. If it has to happen by phone rather than in person, then it’s better than not at all.

Use this meeting in large part to gather a sense of expectations versus results. Your notes from the meeting should be combined with employee interviews and a thorough review of the work product and associated client correspondence, including all billing letters. Only after reviewing all the forensic evidence can you begin the process of drawing conclusions and filing the autopsy report.

Step Three – The Autopsy Report

The autopsy report should include answers to the following questions:

Time of Death (When was it really over, not time of notification)

Day the Relationship Was Pronounced Dead (Notification/Death Certificate)

Genetic/Historical Influences – Chronicle of past client behaviors such as bad credit history or a pattern of burning through other firms.  Quite frankly, issues you may have (or in many cases should have) known before engaging the client in the first place, but either ignored or minimized.

The Match – Were you ever really meant for one another to begin with? It’s important to know yourself and to carefully assess your new prospect, regardless of how much you may believe you want the business. If during the new business pitch, the prospect team members offer disturbing information regarding what they are like to work with – believe what they’re telling you!

A Review of Strengths and Weaknesses of Your Team – In large part, look at this in terms of how certain team members matched up with the client contacts, both in terms of personality types and industry sector. It’s possible that personalities played a role, or you have a staff member who’s terrific in some industry sectors and not as enthusiastic and arguably less effective in others; it may be helpful to take note.

A Review of Processes – Many firms can be very specific regarding how they like to work and are often “less flexible” in dealing clients who may want to work differently. You either find a way to be more adaptable in your processes or, if you find it crucial to function in a very specific manner, you should clearly articulate the benefits of your working relationship style and make sure it’s a good fit from the beginning.

Cause of Death – Did internal issues make the relationship susceptible to external influences? Was there any possibility of resuscitation between TOD and Notification? Identify the root causes of why the relationship went bad.

Summary

Once you’ve examined all the evidence and determined the cause of death, develop a set of strategic considerations and conclusions, and take action as appropriate. Develop your own version of the client relationship autopsy and make it part of your routine. Collect these reports and watch for recurring patterns over time. We all lose clients, but we can lose fewer of them if we choose wisely from the start and pay close attention to the relationship. Finally, don’t wait until the relationship dies to evaluate it, but if it does, don’t miss the opportunity to learn from it either.

*Image from scienceontv.com

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